Acquisition of the company represents one of the potential way to expand the company. There are various forms of business combinations depending if companies participating in the process of merger lose their legal personality or not. In process of acquisition, a company that is acquired by another company, does not lose its legal personality. A company that acquires a subsidiary operates as a group and it has to prepare consolidated financial statements in order to achieve view of the group's business as one. During the process of the consolidation parent company has to eliminate all transactions that occurred between the parent and its subsidiaries, but it is also necessary to sum up identical items. Financial accounting for business is regulated by accounting law and International Financial Reporting Standards for the large companies. Financial accounting for small and medium companies are regulated by Croatian Financial Reporting Standards and also accounting law applicable in Croatia. The aim of this paper is to theoretically handle accounting treatment of business combinations with emphasis on acquisition. Then, on an example from croatian business practice, with analyzing business and financial indicators determine the impact of the acquisition on the parent company Adris group who has aquired Croatia osiguranje d.d. in 2014.